Determination 1149035: IRS revoked a charitable organization's exemption for operating commercial services

View official IRS release (PDF)

Plain-English summary

The IRS revoked a charitable organization's section 501(c)(3) exemption effective January 1, 20XX. It found that the organization's primary activities, including product ordering, shipping, and money transfer services, were regularly conducted business activities that were not substantially related to an exempt purpose. The organization also operated a food bank service, but the IRS found that service was limited to two hours each month. The organization agreed to the revocation and agreed to file Form 1120 returns for the relevant years.

Ruling snapshot

• Question: Did the organization operate exclusively for charitable purposes under IRC section 501(c)(3)?
• Outcome: revocation
• Key authorities: IRC §§ 501(c)(3), 6033, 6104(c), and 7428; Treas. Reg. §§ 1.501(c)(3)-1 and 1.501(c)(3)-1(c)(1); Rev. Rul. 64-182.

Full text (IRS public release)

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
TEGE EO Examinations Mail Stop 4920 DAL
1100 Commerce St.
Dallas, Texas 75242 501.03-00

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION
Date: September 14, 2011
Release Number: 201149035
Release Date: 12/9/2011

Taxpayer Identification Number:
Person to Contact:
Employee Identification Number:
Employee Telephone Number:

XX - Date Address - address Ph
Country - country se
ORG

ADDRESS

CERTIFIED MAIL
Dear

This is a final adverse determination regarding your exempt status under section
501(c)(3) of the Internal Revenue Code (the Code). Our favorable determination
letter to you dated May 19, 19XX, is hereby revoked and you are no longer
exempt under section 501(a) of the Code effective January 1, 20XX.

The revocation of your exempt status was made for the following reason{s}:

Your primary activities since your inception have consisted of product ordering
and shipping services to Country and Country, which are activities not
accomplishing an exempt purpose. In addition, you also operated a money
transfer service to areas of the former Country, which is also an activity that does
not further an exempt purpose. I.R.C. § 501(c)(3) requires organizations to
operate exclusively for an exempt purpose, which includes having a primary
activity accomplishing exempt purposes. See Treas. Reg. § 1.501(c)(3)-1(a).
Section 501(c)(3) precludes Federal income tax exemption if more than an
insubstantial part of the activities is not in furtherance of an exempt purpose.
See Treas. Reg. § 1.501(c)(3)-1(c)(1). As such, you are not an organization
described in section 501(c)(3).

Contributions to your organization are no longer deductible.

You are required to file income tax returns on Form 1120. If you have not

already filed these returns and the examiner has not provided you instructions for
converting your previously filed Form(s) 990 to Form(s) 1120, you should file
these income tax returns with the appropriate Service Center for the tax year[s]
ending December 31, 20XX, and for all tax years thereafter in accordance with
the instructions of the return.

Processing of income tax returns and assessments of any taxes due will not be
delayed should a petition for declaratory judgment be filed under section 7428 of
the Internal Revenue Code.

If you decide to contest this determination, you may file an action for declaratory
judgment under the provisions of section 7428 of the Code in one of the following
three venues: United States Tax Court, the United States Court of Federal
Claims, or the United States District Court for the District of Columbia. A petition
or complaint in one of these three courts must be filed before the 91st day after
the date this determination was mailed to you if you wish to seek review of our
determination. Please contact the clerk of the respective court for rules and the
appropriate forms regarding filing petitions for declaratory judgment by referring
to the enclosed Publication 892. Please note that the United States Tax Court is
the only one of these courts where a declaratory judgment action can be pursued
without the services of a lawyer. You may write to the courts at the following
addresses:

You also have the right to contact the Office of the Taxpayer Advocate.

Taxpayer Advocate assistance is not a substitute for established IRS procedures,
such as the formal Appeals process. The Taxpayer Advocate cannot reverse a
legally correct tax determination, or extend the time fixed by law that you have to
file a petition in a United States court. The Taxpayer Advocate can, however,
see that a tax matter that may not have been resolved through normal channels
gets prompt and proper handling. You may call toll-free, 1-877-777-4778, and
ask for Taxpayer Advocate Assistance. If you prefer, you may contact your local
Taxpayer Advocate at:

If you have any questions, please contact the person whose name and telephone
number are shown in the heading of this letter.

Sincerely,

Nanette M. Downing
Director, EO Examinations

Enclosures:
Publication 892
Form 6018, Consent to Proposed Adverse Action

Internal Revenue Service Department of the Treasury
Internal Revenue Service

TE/GE Exempt Organizations Examinations
915 Second Ave. M/S W540
Seattle, WA 98174-1081

Taxpayer Identification Number:

Date: April 29, 2011
Form:

ORG

Tax Year(s) Ended:
ADDRESS

Person to Contact/ID Number:

Contact Numbers:
Telephone:
Fax:

Certified Mail - Return Receipt Requested

Dear

We have enclosed a copy of our report of examination explaining why we believe revocation of your exempt
status under section 501(c)(3) of the Internal Revenue Code (Code) is necessary.

If you accept our findings, take no further action. We will issue a final revocation letter.

If you do not agree with our proposed revocation, you must submit to us a written request for Appeals Office
consideration within 30 days from the date of this letter to protest our decision. Your protest should include a
statement of the facts, the applicable law, and arguments in support of your position.

An Appeals officer will review your case. The Appeals office is independent of the Director, EO Examinations.
The Appeals Office resolves most disputes informally and promptly. The enclosed Publication 3498, The
Examination Process, and Publication 892, Exempt Organizations Appeal Procedures for Unagreed Issues,
explain how to appeal an Internal Revenue Service (IRS) decision. Publication 3498 also includes information
on your rights as a taxpayer and the IRS collection process.

You may also request that we refer this matter for technical advice as explained in Publication 892. If we issue
a determination letter to you based on technical advice, no further administrative appeal is available to you
within the IRS regarding the issue that was the subject of the technical advice.

Letter 3618 (Rev. 11-2003)
Catalog Number: 34809F

If we do not hear from you within 30 days from the date of this letter, we will process your case based on the
recommendations shown in the report of examination. If you do not protest this proposed determination within
30 days from the date of this letter, the IRS will consider it to be a failure to exhaust your available
administrative remedies. Section 7428(b)(2) of the Code provides, in part: "A declaratory judgment or decree
under this section shall not be issued in any proceeding unless the Tax Court, the Claims Court, or the District
Court of the United States for the District of Columbia determines that the organization involved has exhausted
its administrative remedies within the Internal Revenue Service." We will then issue a final revocation letter.
We will also notify the appropriate state officials of the revocation in accordance with section 6104(c) of the
Code.

You have the right to contact the office of the Taxpayer Advocate. Taxpayer Advocate assistance is not a
substitute for established IRS procedures, such as the formal appeals process. The Taxpayer Advocate cannot
reverse a legally correct tax determination, or extend the time fixed by law that you have to file a petition in a
United States court. The Taxpayer Advocate can, however, see that a tax matter that may not have been
resolved through normal channels gets prompt and proper handling. You may call toll-free 1-877-777-4778 and
ask for Taxpayer Advocate Assistance. If you prefer, you may contact your local Taxpayer Advocate at:

If you have any questions, please call the contact person at the telephone number shown in the heading of this
letter. If you write, please provide a telephone number and the most convenient time to call if we need to
contact you.

Thank you for your cooperation.

Sincerely,

Cathy Tai
Internal Revenue Agent

Enclosures:
Publication 892
Publication 3498
Report of Examination

Letter 3618 (Rev. 11-2003)
Catalog Number: 34809F

Schedule number or exhibit

Form 886-A EXPLANATIONS OF ITEMS

(Rev. January 1994)

Name of taxpayer Tax Identification Number Year/Period ended

ORG EIN 20XX12
20XX12

LEGEND

ORG - Organization name XX - Date Address - address City - city

State - state President - president website - website Country - country

DIR-1 through DIR-36 = 1st through 36th DIR

Issue:

Is ORG operating for charitable purposes as described in section 501(c)(3) of the Internal Revenue
Code?

Facts:

ORG was incorporated on March 2, 19XX.
The Form 1023 was signed by the organization on April 27, 19XX.
In Part II of Form 1023, Activities and Operational Information, it stated the following:
A. Purpose for ORG is to gather clothing, food, medicine, etc. and to ship it to the needy in Country
and Country.
B. This Organization is just starting its activity.
C. The activity will be conducted by the directors & members of this organization in the State of
State.

Internal Revenue Service granted tax exempt status to ORG on September 3, 19XX.

Articles of Incorporation:

Article 9(A) of the Articles of Incorporation provided that “This organization is organized exclusively for
charitable and educational purposes within the meaning of Section 501(c)(3) of the Internal Revenue
Code.”

Website:

The organization’s website address is website.

The organization's website provides 4 different sections: Home Page, Order Form, Destinations, and
Contact Us.

Home Page
History:

ORG a nonprofit organization was established in February of 19XX by collecting clothes, food and
medical equipment to assist the suffering communities of the former Country. Over the years we have
expanded our branches to State and State and to the republics of the former Country such as Country,
Country, Country, Country, Country and Country.

Form 886-A (1-1994) Catalog Number 20810W Page 1 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A

(Rev. January 1994) EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended
20XX12
ORG
FIN 20XX12

We have organized rehabilitation centers, nursing facilities for elders orphanages and facilities for
homeless people in the capitals of the republics mentioned above. In addition we assist low income
families with food and clothing so the children can finish their education and have a better future.
Average family in Country has eight to fifteen children.

Values:
• Friendly and positive environment
• Demonstrate respect for differences
• Foster innovation and creativity
• Show honesty, fairness, compassion, integrity and accountability in all interactions
• Maintain safe, functional and adaptive facilities

Vision:

Our belief is to help people become economically self-sufficient so they can have a better future. The
assistance we provide speaks loudly of the United States as an independent and human oriented
country.

Mission:

Help people to help themselves. Support and encourage people in the former Country to become
economically independent.

Family to Family:

Families in the United States helping former Country families during the times of transformation from
communism to open market economy.

Order Form

Products can be order directly from ORG to Country, Country, Country, Country and Country.

Sender's Last and First Name: Teli( )
Address:
Receiver's Full Name: Tel:()
Product Name: Ib. Suggestion donation Donation
Country, Country | Country, Country Country
Rice —— ~*|~=+50
Flor | 50 | |
Grill oil 35
Vegetable oil 20
‘Macaroni 24

Form 886-A (1-1994) Catalog Number 20810W Page_2_ _publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A

(Rev. January 1994) EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended
20XX12
ORG EIN 0XX12

Buck wheat 25
Clothes detergent 32
Chicken & beef 84 $25 $50 $30
soup packets

Products from Country only

Product Name: lb. Country Quantity Donation
Toasted buck wheat 55 lb.
Sugar 110 lb.
Beef stew (525g) 24 cans
Barley 55 lb.
Millet 55 lb.
Pearl barley 55 lb.

Pack #1 Country $ Pack #2 Country $ Pack #3 Country $

• Buck wheat20lb. - Buck wheat 10lb. - Buck wheat 10lb.
• Sugar 20lbs - Rice 10lb. - Sugar 10lb.
• Beef stew 12 (525g) cans - Sugar 10lb. - Flour 7lb.
• Macaroni 9lb. - Vegetable oil 2L
• Vegetable oil 2L - Macaroni 9lb.
• Beef stew 12 (525g) cans - Rice 10lb.

Please note: The Country products listed above are located at the warehouses in Country. Orders are
conducted by fax four times a month upon arrival of the first container with the packages. The packages are
received much quicker as this method speeds up the process. For Country, Country, Country and
Country the products are sent when the container is filled up. ORG will mail the sales receipt to the
sender, so it is important that you fill out the order form and send it with the check or money order to

ORG.

Destinations

We can help you send your packages to many Republics of the former USSR. Please click on the
country below to see detailed locations.

[ Country ] [ Country ] [ Country ] [ Country ] [ Country ]

Amount of Donation

• Country & Country
• Country, Siberia & Country
• Country

Note
$0. per pound up to 30 lbs-$
$0 per pound up to 30 lbs-$
$0 per pound Up to 30 lbs- $

Form 886-A (1-1994)

Catalog Number 20810W

Page 3 publish.no.irs.gov

Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A

(Rev. January 1994) EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended
20XX12

ORG EIN 20XX12
20XX12

Containers are being delivered on a daily basis to Country and Country. Time frame delivery to
Country is 6-8 weeks from the day you leave your package with ORG. To Country, Country and
Country is 8-12 weeks from the date of container's departure.

Contact Us

We provide mailing services from several different destinations. Please contact the location closest to
you for additional assistance.

City, State Headquarters
ORG
Address,
City, STATE

Mailing Address
Address
City, STATE

Phone: Phone
Fax: Fax
website

For more information
MAP DELETED

Contact Name: President
Phone:
OTHER LOCATIONS

Driving Directions to City Office

DIR-1 DIR-2 DIR-3

Address
City, State
Phone, Fax

Address
City, State
Phone, Fax

Address
City, State
Phone, Fax

DIR-8
Address
City, State
Phone, Fax

DIR-4 DIR-5 DIR-6 (exit 256)
Address Address Address
City, State City, State City, State
Phone, Fax Phone, Fax Phone, Fax
DIR-7 DIR-9 (Exit 186) DIR-10
Address Address Address
City, State City, State City, State
Phone, Fax Phone, Fax Phone, Fax
DIR-11 DIR-12 DIR-13
Address Address Address

Form 886-A (1-1994)

Catalog Number 20810W Page 4

publish.no.irs.gov

Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A
(Rev. January 1994) EXPLANATIONS OF ITEMS
Name of taxpayer Tax identification Number Year/Period ended
ORG EIN 20XX12
20XX12
City, State City, State City, State
Phone, Fax Phone, Fax Phone, Fax
DIR-14 DIR-15 DIR-16
Address Address Address
City, State City, State City, State
Phone, Fax Phone, Fax Phone, Fax
DIR-17 DIR-18 DIR-19
Address Address Address
City, State City, State City, State
Phone, Fax Phone, Fax Phone, Fax
DIR-20 DIR-21 DIR-22
Address Address Address
City, State City, State City, State
Phone, Fax Phone, Fax Phone, Fax
DIR-23 DIR-24 DIR-25
Address Address Address
City, State City, State City, State
Phone, Fax Phone, Fax Phone, Fax
DIR-26
Address
City, State
Phone, Fax
DIR-27 DIR-28 DIR-29
Address Address Address
City, State City, State City, State
Phone, Fax Phone, Fax Phone, Fax
DIR-30 DIR-32 DIR-33
DIR-31 Address Address
Address City, State City, State
City, State Phone, Fax Phone, Fax
Phone, Fax
DIR-34 DIR-35 DIR-36
(Address Address Address
City, State City, State City, State
Phone, Fax Phone, Fax Phone, Fax
Form 990:

Line 1, Part III of the Form 990 provided a brief description of the organization's mission. It stated,
“CHARITABLE RELIEF IN THE FORM OF THE COLLECTION, PURCHASE AND FORWARDING OF

Form 886-A (1-1994)

Catalog Number 20810W Page 5

publish.no.irs.gov

Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A

(Rev. January 1994) EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended
20XX12

ORG EIN 20XX12

FOOD, CLOTHING, CASH AND MEDICAL SUPPLIES TO NATIONS, INDIVIDUALS AND PEOPLE
GROUPS THROUGHOUT THE WORLD.”

The Form 990 filed by ORG for the years ended December 31, 20XX and 20XX revealed the following:

1. Revenue:

The gross revenue received by ORG for the years 20XX and 20XX as follows:

20XX

20XX

Contribution and Grants

2. Expenses:

The expenses of ORG for the years 20XX and 20XX are shown below:

20XX

20XX

Compensation

Other salaries and wages
Payroll taxes

Legal

Accounting

Advertising and promotion
Office expenses
Occupancy

Travel
Depreciation and depletion

Insurance

20XX

20XX

Trucking Costs

Postage and Shipping
Charitable Supplies - Food
Charitable Supplies - Clothing
Charitable Supplies - Medical
All other expenses

Form 886-A

(1-1994) Catalog Number 20810W Page 6

publish.no.irs.gov

Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A
(Rev. January 1994) EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended
ORG EIN 20XX12
20XX12

3. Activities:

The organization has three different activities: food bank, product orders and shipping services; in
addition to providing money transfer services, which was discontinued in early 20XX.

Product Ordering Service

Products from US: ORG provides food supplies and clothes detergents for the shippers who want to
purchase and ship the supplies to the areas of former Country.

Products from Country: ORG also allows its customers to order the products in Country. Customers
can order the products in Country and the goods will be shipped locally to the individuals who live in
Country.

Shipping Service

ORG provides shipping service for people who want to ship the packages/boxes to the areas of
former Country.

The organization also provides the packages/boxes drop locations:

• 4 locations in the State of State: City, City, City and City
• 21 locations in the State of State: City, City, City, City, City (3 locations), City (2 locations), City,
City, City, City, City, City (2 locations), City, City (2 locations), and City (2 locations).
• 1 location in the State of State: City
• 9 locations in the State of State: City, City, City, City, City (2 locations), City, City, and City.

The packages/boxes were collected in those package/box drop locations. The organization had two
trucks to pick up the dropped boxes in those locations each week.

The following pictures were taken when the employees and volunteers were unloading the boxes
which were collected from different box dropping locations.

PICTURES DELETED

Almost each week, the organization arranged a 40’ container to ship to Country. The following
pictures were when the employees and volunteers were loading the boxes to the container.

Money Transfer Service

During the years under examination, the organization provided a money transfer service for its
customers who wanted to wire funds to the individuals who lived in the areas of former Country.

In early 20XX, the organization made a decision to discontinue the money transfer service.

Food Bank

Form 886-A (1-1994) Catalog Number 20810W Page_7 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A
(Rev. January 1994) EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended
ORG EIN 20XX12
20XX12

ORG conducts the services for the State Food Bank. The organization distributes the food provided
by the State Food Bank on every 3rd Tuesday (10:00 am – 11:00 am) and every 4th Thursday (9:30
am – 10:30 am) every month.

LAW:

Section 501(c)(3) of the Internal Revenue Code exempts from federal income tax, organizations
organized and operated exclusively for religious, charitable, scientific, or educational purposes whereby
no part of the net earnings inures to the benefit of any private shareholder or individual, no substantial
part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation
and which does not intervene on behalf of (or in opposition to) any candidate for public office.

Section 1.501(c)(3)-1 of the federal income tax regulations states that in order to be exempt as an
organization described in section 501(c)(3), an organization must be both organized and operated
exclusively for one or more purposes specified in such section. If an organization fails to meet either the
organizational or the operational test, it is not exempt. An organization is organized exclusively for one
or more exempt purposes only if its articles of the organization as defined in subparagraph (2) of this
paragraph: (a) Limit the purposes of such organization to one or more exempt purposes; and (b) Do not
expressly empower the organization to engage, otherwise than as an insubstantial part of its activities,
in activities which in themselves are not in furtherance of one or more exempt purposes.

Section 1.501(c)(3)-1(c)(1) of the Regulations states that an organization will be regarded as “operated
exclusively” for one or more purposes only if it engages primarily in activities which accomplish one or
more such exempt purposes specified in section 501(c)(3). An organization will not be so regarded if
more than an insubstantial part of its activities is not in furtherance of an exempt purpose.

Revenue Ruling 64-182, 1964-1 C. B. 186 holds that an organization is deemed to meet the primary test
of section 1.501(c)(3)-1 of the Regulations and to be entitled to exemption from Federal income tax as a
corporation organized and operated exclusively for charitable purposes within the meaning of section
501(c)(3) of the Code where it is shown to be carrying on through such contributions and grants, a
charitable program commensurate in scope with its financial resources.

Government’s Position:

Based on the facts of the examination, the organization does not qualify for exemption, since the
majority of the services conducted by the organization are regularly carried on as business activities and
not substantially related to furthering the exempt purpose of the organization.

The organization conducted four (4) different activities during the years 20XX and 20XX: products
ordering service, money transfer service, shipping service, and State Food Bank service.

The organization regularly conducts these activities during its business hours, except the money transfer
service, which was discontinued in late 20XX. Its business hours are: Monday through Friday from
10:00 am to 6:00 pm and Saturday from 10:00 am to 1:00 pm.

Product Ordering Service:

Form 886-A (1-1994) Catalog Number 20810W Page_8 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A
(Rev. January 1994) EXPLANATIONS OF ITEMS
Name of taxpayer Tax Identification Number Year/Period ended
ORG EIN 20XX12
20XX12

For convenience to its customers, the organization provides food products such as rice, flour, oil, wheat,
etc. for its customers to order and ship to the area of the former Country.

The products purchased by its customers, were packed and shipped to individual recipients in the area
of former Country.

The organization also provided food products for its customers to purchase in the U.S. Then the
products were locally shipped to individual recipients in the Country.

The prices of food products were determined by the wholesale cost of the product, shipping fees,
custom fees, delivery, State donations, plus 10%~20% operating cost.

The organization regularly conducts the product ordering service during its business hours.

It has been determined that the activity of the product ordering service is a business activity, regularly
carried on, and not substantially related to furthering the exempt purpose of the organization.

Shipping Service:

ORG provides shipping service for people who want to ship the packages/boxes to areas of the former
Country.

The organization has [redacted] package/box drop locations located in the states of State, State, State, and
State, including the organization’s headquarters in City, State. The organization had two trucks to pick
up the packages/boxes and bring back those packages/boxes to the City headquarters facility.

The organization has a container shipped to Country almost every week. It also has a container
shipped to Country every month.

The organization received $ of gross shipping revenue in the year 20XX, which is the more than the
revenue reported in the Form 990. This is because the organization reported net revenue rather than
gross on the Form 990.

During the field visit, the president of the organization, President, explained to the examiner that most of
the packages/boxes collected from churches were individually packed and addressed already. The
churches decided where those boxes were to be shipped and he was not the one who decided who the
recipients of those boxes would be. He just collected the boxes and shipped them to the recipients.

During the field visit, the examiner also saw many Country-speaking customers coming in and shipping
the packages/boxes in the organization’s home office in City, State. It was very busy during the
afternoon hours.

During the years 20XX and 20XX, the organization shipped a total of 40,349 and 33,921 boxes,
respectively. It was the major activity of the organization during the years 20XX and 20XX.

The organization regularly conducts the shipping service during its business hours.

Form 886-A (1-1994) Catalog Number 20810W Page_9 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A
(Rev. January 1994) EXPLANATIONS OF ITEMS
Name of taxpayer Tax Identification Number Year/Period ended
ORG EIN 20XX12
20XX12

It has been determined that the activity of shipping service is a business activity, regularly carried on,
and not substantially related to furthering the exempt purpose of the organization.

Money Transfer Service:

The organization conducted a money transfer service during its business hours in the years 20XX and
20XX. Customers would wire funds from the U.S. to areas of the former Country. On October 18,
20XX, the IRS and United States Attorney's made a seizure against the organization due to
BSA/Structuring/ Money Laundering. The money transfer service was discontinued after the seizure.

It has been determined that the activity of money transfer service was a business activity, regularly
carried on, and not substantially related to furthering the exempt purpose of the organization.

Food Bank Service

ORG conducts State Food Bank services. The organization distributes the foods provided by the State
Food Bank for two hours each month.

It has been determined that the Food Bank service activity is a charitable activity.

Taxpayer’s Position:

The organization agreed to the revocation proposed by IRS. The effective date of the revocation is
January 1, 20XX.

The organization signed the Form 6018 Consent to Proposed Action — Section 7428 and agreed to
submit the Forms 1120 for the years 20XX and 20XX.

Conclusion:

Except two hours of each month of the Food Bank Service, the majority of its activities conducted by the
organization were regularly carried on business activities and not substantially related to furthering the
exempt purpose of the organization.

Based on the facts and laws presented above, ORG has failed to operate exclusively charitable
purposes within the meaning of IRC § 501(c)(3) and reporting requirements under IRC § 6033 to be
recognized as exempt from federal income tax under IRC § 501(c)(3). Accordingly, the organization's
exempt status is revoked effective January 1, 20XX.

Form 886-A (1-1994) Catalog Number 20810W Page 10 publish.no.irs.gov Department of the Treasury-Internal Revenue Service